WASHINGTON -- Bill Gates said on Tuesday that a set of proposed antitrust penalties could force Microsoft to stop selling Windows.
It was Microsoft's most concerted attack yet on a plan devised by nine states to limit future antitrust wrongdoing -- an idea that Gates characterized as rife with unintended consequences and being impossible to follow.
During his second day on the witness stand, Gates singled out a key sentence in the 42-page proposal (PDF), which says that Microsoft must "cease" including Internet Explorer with Windows or, alternatively, "offer its operating system software" without it.
"What's required is clearly not feasible for us to do," Gates said. "We'd be in an awful situation, where we would be under a court order with which we couldn't comply and have to pull Windows out of the marketplace."
Ever since its antitrust travails began in late 1997, Microsoft has stressed that Internet Explorer includes far more than just a Web browser -- applications rely on it for displaying HTML text, formatting output and using Internet services.
The states, in response, spent the day attempting to show that Gates was far too extreme in his interpretation of the restrictions the plan would levy on the world's largest software company.
Steven Kuney, an antitrust attorney for the still-litigating states, said "there's no loss on selling the current version of Windows as long as you come up with something that satisfies" the requirement.
Kuney also assailed Gates' written testimony, in which he had minimized the threat that Netscape Navigator and Sun's Java programming language posed to Microsoft. Gates had written they "supposedly had the potential to become general-purpose software development platforms."
In response, Kuney produced internal e-mail messages and documents written at the time in which Gates appeared far more spooked about Navigator and Java as threats to the Windows platform.
"If it'd be helpful, I would be glad to strike the word 'supposedly,'" Gates offered sarcastically.
"I'm always interested in ways you'd like to change your sworn testimony," Kuney replied.
Gates protested the states' proposal that forces Microsoft to continue licensing old versions of Windows, saying that such a requirement would lead to fragmentation of the operating system and consumer confusion.
"Obsolete versions of Windows are a drag on the ecosystem," Gates said. "I think confusion in the PC consumer market is something we worry about quite a bit."
"You'd rather that people didn't get a discount for buying the older version of Windows," Kuney replied. "You're not interested in giving people a choice of a variety of prices and a variety of features."
Gates also testified that the states' proposal would imperil the security of Windows users.
"If it degrades the performance, we couldn't put out the security patch without giving 60 days' notice," said Gates. He was talking about a section that says any changes that degrade the performance of competitors' software must be subject to advance notification.
Nine states, plus the District of Columbia, are pursuing stronger antitrust sanctions against Microsoft. Nine other states and the Justice Department have reached a tentative settlement that must be approved by U.S. District Judge Colleen Kollar-Kotelly.
The nine still-litigating states are California, Connecticut, Florida, Iowa, Kansas, Massachusetts, Minnesota, Utah and West Virginia.
Witnesses called by Microsoft are currently testifying during the courtroom proceedings, which will last at least a few more weeks. Microsoft has listed Steve Ballmer, its chief executive, among the company executives expected to testify.
Robert Zarate reported from Washington. Declan McCullagh contributed to this report from Omaha, Nebraska.
